How Facebook Affected Consumer Behavior

On February 16, 2009 Facebook users, journalists, and members of other social media websites were alarmed when Facebook released its new Terms of Service (TOS) policy.

Unlike the former policy, the new TOS stated that:

“You hereby grant Facebook an irrevocable, perpetual, non-exclusive, transferable, fully paid, worldwide license (with the right to sublicense) to (a) use, copy, publish, stream, store, retain, publicly perform or display, transmit, scan, reformat, modify, edit, frame, translate, excerpt, adapt, create derivative works and distribute (through multiple tiers), any User Content you (i) Post on or in connection with the Facebook Service or the promotion thereof subject only to your privacy settings or (ii) enable a user to Post, including by offering a Share Link on your website and (b) to use your name, likeness and image for any purpose, including commercial or advertising, each of (a) and (b) on or in connection with the Facebook Service or the promotion thereof.” (Walters, 2009).

This new policy allowed Facebook to profit from user information, by selling such details to third-parties. From a consumer privacy standpoint, it is easy to understand why the new TOS proved to be controversial. Some users – despite all warnings – post their addresses, phone numbers, and email addresses on Facebook. With the new TOS, Facebook could sell a user’s phone number and assigned metropolitan area to a third-party advertiser that had intentions to market local services to the user.

Through this new TOS policy Facebook created a footnote in consumer history. Facebook has 250 million members (Press Room, 2009). New consumer advocacy groups formed to protest the policy, even creating pages on Facebook itself. The groups gained momentum with individual users. In viral-marketing style, users began to share information about the new TOS with other users, who then became “fans” of the consumer advocacy groups. With a potential reach of 250 million members, the outcry against the TOS became unmanageable for Facebook. As a result, after three short days of backlash, the corporation decided to revert to the old Terms of Service policy as they work towards creating a new TOS that addresses user concerns (Boutin, 2009).

Never before has a social networking site been the recipient of such consumer ire on such a massive scale. Facebook users found a consumer cause and channeled the social networking site to spread information. With this campaign’s quick success, consumers learned that they can use the web to protest against corporate iniquities.

Another notable idea is that web-users may have enough wariness of third-party advertisers that they are absolutely unwilling to knowingly participate in any activity on the web that would relinquish private details. Third-party advertisers have been operating on the web for years, gathering information about users in order to develop demographic-specific advertisements. However, according to the response towards the Facebook TOS, we can determine that consumers may be tired of these perceived invasions of privacy. As a result, third-party advertising may have lost a major public relations battle.

 

References

Walters, Chris, 2009. Facebook’s New Terms of Service: “We Can Do Anything We Want With Your Content. Forever.” The Consumerist Online. [Internet]. 15 Feb 09. Available at: http://consumerist.com/5150175/facebooks-new-terms-of-service-we-can-do-anything-we-want-with-your-content-forever [Accessed 16 Aug 2009]

Press Room, 2009. Statistics.[Online] Available at http://www.facebook.com/press/info.php?statistics [Accessed 16 Aug 2009]

 Boutin, Paul, 2009. Facebook reverts to old terms, promises to craft new TOS with user input. The Industry Standard Online [internet] 18 Feb 2009. Available at: http://www.thestandard.com/news/2009/02/18/facebook-caves-members-terms-service [Accessed 16 Aug 2009].

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